Green Stay Interview

Transcript

Ayako Ezaki (TrainingAid): Hello and welcome. My name is Ayako Ezaki and I'm a director and trainer at TrainingAid, an international training company specialized in sustainable tourism. It's a great pleasure for us to be working with HRS on offering educational solutions for the HRS Green Stay program. And that's exactly what we'll be doing in this video, helping you better understand and make the most of Green Stay for your hotel. And to do that, we will be hearing from Fabio, who has been facilitating the sustainability initiatives at HRS. Fabio, please tell us a little bit about what you do at HRS.

Fabio Fornari (HRS): Thank you, Ayako. It's really great to be here. So my name is Fabio Fornari, and in my role at HRS, I focus on product areas related to sustainability and safety. And specifically I've been working on expanding the Green State Initiative and engaging more buyers and suppliers in working with sustainability and understanding where the data comes from, and how they can use the Green Stay Initiative for their benefit.

Ayako Ezaki : Great! So, let's dive right in, and learn more about Green Stay. To start, can you give us a quick "elevator pitch" on Green Stay? What is it? And why is it important?

Fabio Fornari: Of course. So, the Green State initiative is a free-of-charge tool for all HRS Hotel Partners to not only track but also report on their sustainability performance. And the way we do that is collecting the data from hotels with our own audit platform which was developed by HRS. And we follow recognized international standards such as the Hotel Carbon Measurement Initiative and the Greenhouse Gas Protocol.

And we developed this initiative to support our corporate clients to make informed decisions according to their own climate goals and requirements. So this was of course a demand from our corporate clients to have access to more detailed information on sustainability, given the fact that this is more and more required from different sources, and this is really a pressure on certain corporate customers.

So the Green Stay Initiative was launched in 2021and it's already a very important tool for both buyers and suppliers because it really helps streamline the processes of procuring and booking based on sustainability and also - a very important component - the reporting; the data for reporting using sustainability metrics. And of course frameworks that are aligned with international methodologies.

So what the Green Stay Initiative does is to have an end-to-end perspective, to have access to sustainability data in a consistent and reliable way. And of course this makes a win-win situation because hotels want to communicate efficiently and effectively about their sustainability efforts and for the customers, the corporate customers, on the other hand, they need this data because they are increasingly facing internal and external sustainability related requirements.

So at the end of the day, the Green Stay Initiative is helping not only our suppliers, but also the corporate customers with their demands so I believe, with the Green Stay initiative, we are helping both sides to match these needs in terms of sustainability requirements.

Ayako Ezaki : Thank you. So you mentioned an important part of the business case for sustainability and why it's important for hotels to get involved in sustainability measuring their performance and sustainability reporting. On that, can you share a little bit more about why those corporate clients are interested in and requiring more and more sustainability data from the hotels that they buy from?

Fabio Fornari: Of course. I think for one there's the fact that we live in a climate crisis and our industry - well our planet of course - is facing an existential threat. So it makes sense that all businesses are not only concerned about the situation, but are doing something about it, and everything that is possible to reduce their negative impacts. So that's really the bottom line and the first concern we have in mind when we start talking about this type of issue, and why we've developed the Green Stay Initiative.

But of course, we need to think about how we do this effectively. So when we look at the corporate lodging sector, another key factor that is affecting the buyer's decision is risk management. So it's not only about thinking how you can reduce your impacts, but also how you can disclose what you're doing with the right data. So in terms of legal and reputational risks, corporations, especially large corporations (such as the ones we have as our customers), they are facing increasing pressure for climate risk and sustainability performance disclosure.

So a good example of that is the Corporate Sustainability Reporting Directive in the European Union, which will be coming into effect in 2025. So there's not a lot of time to really prepare for this type of directive. And also many corporations have their own "net zero" pledges and climate related policies, which have been developed in the last - let's say - five years, after the Paris Agreement. So, as part of these they need to address what we call the "Scope 3" emissions, which are indirect emissions connected to their supply chains, and this of course includes business travel.

So, from the corporate perspective, they really need to put pressure and influence their suppliers to comply with what they need to reduce their emissions. And it's actually in their business interest to avoid emissions as much as possible because of the rapidly increasing price of carbon compensation and also the possibility of losing access to credit in the financial markets. So, when you look at the broader perspective of this topic, you see that it's not only in the interest of corporations but also of their suppliers to work together to reduce emissions. Because at the end of the day, it's a positive impact for all of them. And of course for the planet.

And in that sense, any delay in taking sustainability seriously is a real threat to the financial bottom line of these corporations, and of the suppliers. And of course, it's a risk for the planet. So that's, in a nutshell, why we've developed the Green Stat Initiative; because with this type of data, we can help both sides. And of course, the planet as a whole.

Ayako Ezaki : So the business case is very strong on both sides, which is really important to realize and emphasize. And for those corporate clients that you told us about - they are seeking more information and more sustainability data from the suppliers. And in that, it seems that having access to accurate data is key to their success. So please tell us a little bit more about how Green Stay helps ensure that those clients have access to accurate and consistent data from their hotels.

Fabio Fornari: In short, I think it's by using a credible standard. We all know that there are many standards and labels out there and during the research to develop the Green Stay Initiative, we found out that there are more than 200 sustainability labels out there for hotels, for example, and many of them, of course, comply with international frameworks and really provide data that are reliable, but, at the end of the day, for the type of data we need for our customers to really make decisions, these labels were not enough. So what we did was rather than reinventing the wheel the Green

Stay criteria was developed to really comply with credible and recognized and relevant frameworks out there. So that's why we did this research as a kind of the first step, and then, developed based on the the best practices, these really relevant frameworks that include for example, the Greenhouse Gas Protocol, which provides the world's most widely used greenhouse gas accounting standards the ISO 14064, for example, for environmental management standards, addressing carbon emissions and their correct calculation, and so on.

We used all of these elements to structure the way we want to collect and normalize the
data to display to our customers and at the end of day, this also means that the Green Stay Criteria are also in line with the leading sustainability frameworks in the hospitality sector. We also followed the Hotel Carbon Measurement Initiative developed by the Sustainable Hospitality Alliance.

So when you go through what we call our Green Stay Assessment, you're really going through a methodology that is already recognized in the hospitality sector, but also internationally because it complies with the Greenhouse Gas Protocol and so on.

And lastly, and very importantly, Green Stay makes it possible to streamline all the footprint data shared by different hotels and produces a matrix in a way that allows for comparison across hotels, because this is very important for corporate customers, of course.

And this, by the way, is what we mean when we say normalizing metrics because without that we would end up having different hotels measuring different things in different units and scales and the data collected wouldn't be usable. So that's why the Green Stay Initiative has a standardized approach and that's why a tool like this is so important for our customers and also, of course, for hotels because, at the end of the day, you can only do something when you start measuring and understanding your impact. So for our suppliers the Green Stay Initiative very important.

Ayako Ezaki : "You can't manage what you don't measure". So yes, a great point. And so now we know more about what Green Stay is and why it's important, as well as how it has been designed - a little bit of background. So can we switch gears a little bit now and focus on how it works for hotels? If a hotel wants to get involved in the Green Stay program, what are some of the first steps?

Fabio Fornari: Of course! Any HRS Hotel Partner can start with the self-assessment on its environmental footprints on the Audit Portal which I mentioned earlier. So let's say you are a Hotel Partner and you have no idea where to start, you already have a link dedicated to your hotel so you can ask for help from one of your partners at HRS, and we will provide you with all the information. And once you click at this link, you will be directed to the other Portal where you will have the possibilities of getting to the Green Stay Initiative according to your sustainability performance right now.

So let's say you're just a hotel that is only starting on your sustainability journey. Now you can start as a Basic hotel. Or if you're already advanced and already have some of the data we we are asking for in terms of energy, water usage and waste production, you can go into the Advanced level, or even up to the Professional level, if you already have an audit in place, for example, that suggest that your data is according to what you are disclosing.

So we understand, and our corporate clients do too, that different hotels are in different stages of their sustainability journey. So we haven't really set up Green Stay as a way to reward the "greenest" hotels. Of course, there is a scoring in place which identifies the hotels that perform a little bit better in terms of sustainability, but we, again, don't want you to go into this route, and it's a tool to really help any hotel supplier to track and share their sustainability efforts and improvements over time.

And again, as I said, to accurately represent these different stages of sustainability. There are three levels: Basic, Advanced, and Professional. And for each of these three levels hotels need to meet the minimal required number of the Green Stay Criteria. So the hotels that are part of the Green Stay also receive free marketing materials for their websites. And of course, as soon as you're part of the Green Stay, you will be identified as such in the procurement platform in the booking channels.

And you will, at the end of the day, have the data for reporting and and, of course, you will be able to benchmark your hotel in the country level and and in the destination level so you can compare if you are performing according to your competitors or if you should improve. Also something that helps you identify if your sustainability efforts are having a return is as soon as you're a part of Green Stay, you will notice for example, if you're having more volume on the booking side or in the procurement side. We provide all of these insights as soon as you're part of the Green Stay Initiative.

Ayako Ezaki : Great, so that sounds like one of the key benefits for hotels - not only that they're able to work on their reporting in an accurate manner following the tool that has been created based on standards, but also that the hotels themself are able to gain a better insight into their own performance in an ongoing way. So on that point, how about the buyers? What options do they have - those corporate clients - for accessing and using data on hotel suppliers' sustainability performance?

Fabio Fornari: Yes, of course. I believe one of the most powerful ways Green Stay is being used for a corporate client is in the procurement phase. So this is where we really give a very detailed set of information that we collected from the hotels to the travel managers. So in the procurement area, you will see very granular data on what was provided by our Hotel Partners. And also, when Hotel Partners are not part of the Green Stay Initiative yet, we are also able to calculate what a similar metric would be for that hotel in the destination, because now we have a very large data set based on the hotels that are part of the Green Stay Initiative.

So, each client, also according to their own sustainability ambition, can set different scoring metrics to guide their decision making and this means, for example, that a given corporation may set a filter for hotel suppliers that have, for example, a minimum of 70% of Advanced-level requirements. Or another corporation may choose to show only hotels that have achieved a certain point, or a certain performance on their carbon emissions. So since these priorities are set at the corporate procurement level, all booking options later on that are available for travel managers automatically reflect such requirements.

That's why the procurement phase is so important and why we really give all the granular data there because we want to make it easier for the travelers when they are in the booking channels, to know "OK, the hotels I'm seeing here are part of Green Stay and they have already been selected by the travel manager. So I don't have to really dive into all those data points", for example. Of course, there's more information there, but it's more focused on what the traveler needs. And also this means that every step hotel suppliers make to progress along the Green Stay levels and to make improvements within each level will positively affect their return on investment.

And, in fact, as I mentioned, our performance data on hotel suppliers show that the properties participating in Green Stay have higher RFP acceptance rate than those that are not part of Green Stay. And also we see that most people think that investing in sustainable hotels or hotels part of the Green Stay Initiative would demand more money, but that's actually not the case. We have seen that on average, there's 8% less cost investing in Green Stay hotels than in the other hotels that are not part of the Green Stay Initiative. And we see that this difference is expected to grow further in terms of volumes, as more and more corporate clients are making Green Stay a required part of their RFPs. So, we have seen that with Siemens, as a preferred condition for their business travel policies.

Ayako Ezaki : So again, a really strong business case for getting engaged in sustainability. It sounds like Green Stay is really enabling your partners on both sides to make progress over time. I hope that this has been a really good way for many hotels to get inspired to get started on Green Stay. And for those hotels that are already engaged, this may also be a really great way to motivate themselves for continuous improvement, which is really what sustainability is all about. So, thank you again, Fabio, for sharing your insights, and best wishes for all the HRS Hotel Partners on your individual Green Stay journeys!

Fabio Fornari: Thank you.